Our housing crisis is often described as a complicated picture, a vice of conflicting pressures. But this week's news demonstrates how, at it's heart, it is very simple: it is a crisis of supply and demand, and of the widening gap between the haves and have nots.

House prices are rising at their fastest level since November 2006, according to the Royal Institution of Chartered Surveyors. House price inflation rose by 3.1% on average in the year to June 2013, government statistics show. In parts of London and the south east, the increase was as high as 8%.

But in Scotland and Northern Ireland house prices are still falling, and much of the movement in the housing market is in areas where prices have been depressed for longest. While in wealthy regions inflation is boosting the coffers of existing homeowners, it is placing ownership still further out of reach of the rest.

Commentators are split: the rise in prices is either early evidence of a recovering economy, or the first sign of a new government-sponsored housing bubble that will burst with devastating repercussions. Both camps are right.

It's true that the sudden escalation in house prices coincides with government efforts to artificially stimulate the private housing market. The Help to Buy scheme, which was launched earlier this year, provides an equity loan of 20% of a property up to the value of £600,000 to help buyers take their first step on the housing ladder. It has been perhaps more popular than even the government itself expected.

Figures released this month indicate there have been 10,000 registrations for Help to Buy since April, with the majority of these registering interest in the two months since June. There's no doubt that this bridge, providing access to home ownership to those who would otherwise be locked out (arguably for life), has breathed new life into the housing market triggering price inflation once again.

Price rises are indeed indicative of a growing economy, so those claiming government policies are working aren't exactly wrong. The problem is that what is good for the economy in the short term isn't necessarily good for society.

House price inflation triggered by government incentives gives a handout to the asset-rich and simultaneously takes away life chances from those who do not hold property. It does this because the government has failed to address the core problem at the root of the housing crisis – the basic economic seesaw of supply and demand.

We are not building enough new housing to keep up with rising household formation, ergo the cost of securing that scarce accommodation will continue to rise.

It is poignant that newspaper headlines screamed about house prices on the rise in the same week that government caps to welfare payments came into place, leaving many of those claiming housing benefit or the local housing allowance facing a move to a cheaper property or location to manage the cut.

Welfare reform, Help to Buy, assisted mortgages and even shared ownership (though the original schemes were designed 30 years ago) are all a sticking plaster on the injury that nobody wants to start treating. Successive governments have failed to invest in housing stock of all types and tenures for decades, resulting a national under-supply, regional bubbles and local market failures. The coalition government has focused on private ownership at the expense of other tenures, and actively removed funding for schemes that tackle housing market failure.

To prevent a government-funded house price bubble that explodes 10 years hence, we need sustained investment in housing of all types: private homes at an affordable prices, social rented housing for those who cannot reach ownership, and decent private rented sector for those who are between the tenures.

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